This article appears courtesy of Early To Rise, a free newsletter dedicated to making money, improving health and secrets to success. For a complimentary subscription, visit http://www.earlytorise.com. Originally appeared in Early To Rise (07/18/2009).
How to Avoid the 3 Biggest Mistakes Stock Market Investors Make
by Michael Masterson
I’m not an expert in stocks, but I have been involved with stock market publications and stock market gurus for more than 25 years. During that time, I’ve met a lot of characters – some brilliant men without a trace of honesty and some honest men without a trace of intelligence.
I’ve seen investors (including myself) swindled, bamboozled, conned, and just plain charmed.
I’ve seen a lot. And though I have never attempted to figure out the stock market or how to get the better of it, I now have an idea of what works and what doesn’t.
Three caveats, in particular, have come to make sense to me:
- Don’t put too much money in any one recommendation. By limiting each investment, you’ll never get hurt so badly that you won’t be able to keep going.
- Never invest in something just because you like the story behind it. A story, by its very nature, is meant to dramatize, not to inform.
- Don’t leave money in an investment after it turns south. I have many good investment-expert friends who will tell me I’m wrong about this one – but in my experience, when a business starts to fail it will almost always continue in that direction. When it comes to investing in your own business, you know enough about it that you might be able to do something extraordinary to turn things around. But when it comes to other people’s businesses… their success or failure is completely out of your control.
